In reply to Tiberius:
The point that is often made by people who know what they are talking about* (Dave Mac, Arno Ilger/rock warrior's way, Dr. Rebecca Williams) is that there is often this perception that 'falling practice' has to involve massive whippers. It doesn't.
From a psychological perspective, dealing with a fear of falling is about trying to deal with a conditioned response (fear) to a stimulus (being about to fall off) by first breaking the conditioning, then by conditioning another response (say relaxation).
If you are scared of falling and you start trying to take massive practice lobs, all that is happening is that you are further reinforcing the conditioning of falling -> fear. The most important thing is to practice relaxation in the situation you are frightened of, rather than the lengths of the lob you are taking. From this point of view it might better be described as 'relaxation practice' or 'fear management practice' rather than 'falling practice'.
What a better approach is, is to start by sitting on the rope, and practice feeling relaxed. Close your eyes and visualise a situation which you associate with feeling relaxed. Personally, I am chilled with falling off when bouldering indoors, even from the top of the wall - so I visualise sitting on the mat, maybe putting my shoes on, having a laugh with some mates, the ritual I go through before getting on to a boulder problem. Then, staying relaxed, climb up a move or two, and drop back down. Perhaps visualising just 'stepping down' for a second from the first moves of a problem. Then slowly continue increasing the distance of the falls but the most important bit is that you continue to feel relaxed. As soon as you start hesitating and feeling scared, you have overcooked it and need to drop back down, as you are not dealing with your fear any more.
Ultimately if you can break the conditioning that makes you scared in a situation where you might fall (but it is safe to do so) you don't freeze up due to the fear (making falling more likely as you are prone to hesitate, not think clearly, or otherwise make mistakes when you are scared) but stay relaxed, chilled out, able to work out what you need to do in a reasonably relaxed manner, giving you the best chance of ticking your route.
*links
Dr Rebecca Williams:
http://smartclimbing.blogspot.com/2009/11/falling-off-practice-how-to-do-it...
Arno Ilger:
http://www.ukclimbing.com/articles/page.php?id=874
Dave Mac:
http://onlineclimbingcoach.blogspot.com/2009/10/fear-of-falling-dictates-yo...
http://onlineclimbingcoach.blogspot.com/2009/07/beating-fear-of-falling-in-...